· Stocks rose on Wednesday as the energy sector got a lift from higher oil prices, but sentiment was kept in check with a key part of the U.S. yield curve inverting even further, exacerbating fears of an impending recession.
The Dow Jones Industrial Average closed 258.20 points higher, or 1% at 26,036.10. The S&P 500 climbed 0.7% to 2,887.94 while the Nasdaq Composite advanced 0.4% to end the day at 7,856.88. Chevron and Exxon Mobil contributed to the Dow’s gains, rising 0.8% and 0.7%, respectively.
The S&P 500 energy sector jumped 1.4%, led by a 10.6% surge in Cimarex Energy, as U.S. crude prices surged more than 1%. Oil jumped after the Energy Information Administration said U.S. crude inventories plummeted by 10 million barrels last week. Crude gained settled at $55.78 per barrel.
· European stocks ended Wednesday’s session in negative territory after the U.S. yield curve inversion deepened to levels not seen since 2007, reigniting fears of an impending recession.
The pan-European Stoxx 600 was 0.1% lower at the closing bell, insurance stocks shedding 1.2% while the oil and gas sector posted gains on the back of higher oil prices.
The Nikkei 225 in Japan traded 0.1% lower in early trade, while the Topix was slightly lower. Over in South Korea, the Kospi was fractionally higher.
Meanwhile, Australia’s S&P/ASX 200 traded slightly higher.
Overall, the MSCI Asia ex-Japan index was largely flat.
Investors continue to monitor the yields in U.S. Treasurys. The 30-year bond yield fell to a new record low of 1.907% on Wednesday before seeing a partial recovery. It was last at 1.9474%.
The closely-watched yield spread between the 10-year Treasury note and 2-year note also widened further on Wednesday, extending losses from the previous session where it touched its lowest level since 2007. The phenomenon, also known as a yield curve inversion, has historically preceded periods of recession. The yields on the 10-year Treasury note and 2-year note were last at 1.4626% and 1.492%, respectively.
Energy stocks in the region rose in the morning, after strong gains were seen in the sector overnight stateside.
Over in Australia, Santos advanced 1.35% and Woodside Petroleum jumped 1.24%, while Japan’s Japan Petroleum Exploration gained 1.42% and Fuji Oil Holdings rose 0.35%. South Korea’s SK Innovation also added 1.28%.
Markets continue to remain on edge as investors await developments on the U.S.-China trade front, with the tariff war between the two economic powerhouses recently escalating and further dampening sentiment and raising concerns over the global economic outlook.
Reference: CNBC
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